VVIP chopper deal scam: Former IAF chief SP Tyagi arrested in the AgustaWestland Rs 3,600 cr case

By: | Updated: December 11, 2016 3:00 PM

Former Indian Air Force chief S P Tyagi, his cousin Sanjeev alias Julie Tyagi and lawyer-businessman Gautam Khaitan were arrested by the Central Bureau of Investigation (CBI) Friday in connection with the R3,600-crore AgustaWestland VVIP helicopter deal case.

Khaitan was allegedly the main cog in a money-laundering wheel that facilitated the movement of bribes through a maze of companies. (Reuters Image)Khaitan was allegedly the main cog in a money-laundering wheel that facilitated the movement of bribes through a maze of companies. (Reuters Image)

Former Indian Air Force chief S P Tyagi, his cousin Sanjeev alias Julie Tyagi and lawyer-businessman Gautam Khaitan were arrested by the Central Bureau of Investigation (CBI) Friday in connection with the R3,600-crore AgustaWestland VVIP helicopter deal case.

This is the first time that a military chief of the country has been arrested in a probe into alleged corruption in defence procurement. He and the others are likely to be produced in a Delhi court Saturday.

As first reported by The Indian Express on February 13, 2013, Italian investigators first alleged that the Tyagis received bribes to swing the deal in favour of AgustaWestland, a wholly owned subsidiary of Finmeccanica, by tweaking technical requirements of the tender.

Khaitan was allegedly the main cog in a money-laundering wheel that facilitated the movement of bribes through a maze of companies.

In February 2010, India had signed a contract with AgustaWestland International Ltd (AWIL) for supply of 12 AW 101 VVIP helicopters at an aggregated price of R3726.96 crore. The government cancelled the deal in January 2014 “on grounds of breach of the pre-contract integrity pact and the agreement”

CBI sources said the Tyagi brothers and Khaitan were called for questioning Friday morning and were arrested in the afternoon after they did not cooperate in the investigation.

CBI officials claimed to have evidence against the Tyagis and Khaitan, which includes information on their financial transactions received from abroad. Details of the evidence were not, however, shared by the agency.

Earlier this year, Italian authorities had shared 1.5 lakh documents related to the deal and the alleged bribes. These documents, CBI sources said, “were helpful”.

The CBI alleged that Indians were paid bribes of R362 crore to swing the deal in favour of AW. The agency claimed that during the tenure of S P Tyagi, the IAF “conceded to reduce the service ceiling for VVIP helicopters from 6,000 metres to 4,500 metres” with his approval, which allowed AW to swing the contract.

The CBI inquiry also found that bribes were allegedly paid through a complex web of companies and middlemen based in Italy, UK, Tunisia, Mauritius, Singapore, British Virgin Islands, Switzerland and the UAE. Letters rogatory have been sent to these entities. The BVI and Tunisia, sources said, have “partially replied”.

The Enforcement Directorate (ED), also investigating the case, too filed chargesheets against Khaitan and alleged middleman Christian Michel.

According to the ED chargesheets, the cousins of S P Tyagi played a major role in bringing in middlemen to swing the deal for AW and had begun negotiating even before Tyagi became IAF chief in January 2005.

Investigations found that Guido Haschke, who had been brought into the deal in 2004, allegedly by the Tyagi brothers by offering to swing the deal in favour of any company that he could bring to the table, was so confident of their abilities that he had begun payments to them from AW in 2004 itself.

The ED prosecution complaint notes: “Tyagi brothers namely Sanjeev, Rajeev and Sandeep, cousins of S P Tyagi, who had long acquaintance with Guido Haschke and Carlo Gerosa (another alleged middleman)… entered into a consultancy contract with Gordan Services Sarl, Tunisia in 2004. Gordon Services was linked to Haschke and Gerosa. The Tyagi brothers received Euro 1.26 lakh after May 2004 and Euro 2 lakh after February 2005. Tyagi brothers, including S P Tyagi, also received some amount in cash.”

In June, the ED told a Delhi special court that Christian Michel allegedly received 30 million euros as kickbacks and sent cash packets to various people through his driver and regularly met Indian individuals, including cousins of S P Tyagi, while brokering the deal.

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